Business Automation Energy Analytics

Simplify mineral management and maximize revenue with the right technology solutions

byEliot Stone

Oil and gas operating companies and non-ops — mineral, royalty and working interest owners — are two sides of the same coin. In the digital age, non-ops need to be just as data and software savvy as E&Ps, but technology innovation has historically focused on operators. However, there is good news for non-ops.

With Enverus’ purpose-built mineral management technology and business automation solutions, non-ops are able to automate revenue delivery and manage portfolios at any scale. With critical data sets built directly into these tools (wells, volumes, mineral appraisals, units, rig activity, etc.), users can manage the entire investment lifecycle from pre-acquisition due diligence , mineral portfolio management through maximizing deal value for divestitures.

Let’s review the day-to-day management of a non-op portfolio and show how mineral funds, family offices, banks, foundations and endowments know that they are always in pay, ensure revenue accuracy and optimize their G&A costs.

What’s holding back the non-op back office?

While operators and non-ops may be two sides of a coin, mineral, royalty and working interest investors have very different business drivers with tough questions that need answers, such as:

  • Am I getting paid correctly for my interest in a well?
  • Were the right commodity prices used to calculate my revenue?
  • Are operators charging me correctly for deductions?
  • Am I in pay on all new producing wells on my property?
  • Am I being paid correctly following the payout conversion on a well?
  • Were the correct oil, gas and NGL volumes used to calculate my revenue?

These are straight forward questions that are all too often impossible to easily answer.

One of the biggest barriers is the massive paper data problem and persistent manual data entry that non-ops face in the back office. It’s not uncommon to receive a check stub for a stripper well that’s more than 300 pages, making it cost more to process revenue details than the hydrocarbons are worth. Many non-ops struggle to close their month and that leaves precious little time to consider the big picture, missing wells and underpayments.

Non-ops also contend with a fragmented digital ecosystem of software and data silos, presenting a complicated mix of paper-based processes and digital revenue and JIBs. Organizational barriers to answering simple questions also persist that impede efficient mineral management workflows, including departmental layers of ownership where land owns leases and division orders, while accounting owns revenue and expenses.

These old methods of managing the non-op back office stand in the way of answering important questions. The main cause for underpayments (or non-payment for missing wells) is simply operator oversight. Today’s fast-paced production environment places enormous strain on operators who are being asked to produce more. Underreported volumes, missing wells on revenue detail statements, incorrect decimals and improper deductions (e.g., being charged for a no-cost lease) fall through the cracks.

A better way forward through automation and integration

One hundred percent of your non-op revenue can now be delivered straight into Enverus’ cloud-based mineral management software for touchless revenue processing. This is achieved through a combination of an automated operator data exchange and scanned document data extraction services for out-of-network operators, making all your revenue available within a few days instead of weeks or even longer. This completely replaces manual entry and check detail processing, eliminating human errors.

There’s tremendous payoff for hunting down and eliminating underpayments. And just think what higher value tasks accounting staff can be redirected to!

Spotting missing wells

Building a list of well names and API numbers to spot missing wells is a simple solution that would normally require hours of painstaking work. But increasing M&A activity results in well names changing several times within a few years, which can make it difficult to know when a new well goes in on your property. Enverus’ cloud-based mineral management software makes this a fast, simple process. This technology also empowers users with email alerts and cloud-based maps to monitor acreage by exception, track rig movement and see when frac crews show up for a completion to identify wells they should be in pay on.

Auditing improper deductions

Depending on the type of interest you own and the terms of a lease, you might be exempt from paying some post-production costs, but the operator charges you anyway through revenue deductions or even adjusting realized prices. To prevent taking a hit on your margins or even a negative royalty, users of cloud-based mineral management solutions can run a no-cost lease audit to spot improper deductions using a pre-built report. Simple!

Finding incorrect ownership decimals

Don’t assume your interest decimals are correct! Mineral interest is tracked to the eighth decimal place, so even a small miscalculation, dropped decimal place or rounding error can impact your bottom line or  result in you cutting a check to the operator from an overpayment. Enverus’ mineral management technology helps you find decimal issues by digitally managing land information in a central location so you can stay organized and take action to correct and recover missing revenue. No more filing cabinets!

Identifying underreported volumes

Oil and gas operating companies are driven by two monthly production reporting cycles. The complexities of accounting for sales and paying interest owners, plus state regulatory reporting, doesn’t always produce the same financial statements and underpayments are often missed.

By bringing production verification tools, check stub details and public data sets together, mineral management and business automation solutions equip non-ops to find the underreported volumes that they are owed on faster than ever.

Payout and interest conversion

Preventing this type of underpayment is especially tough because payout on a new well can take years with multiple factors determining the timing. Missing a payout conversion can have huge implications, especially if there is an unleased interest in a drill tract that is not subject to forced pooling.

Enverus’ mineral management technology helps you avoid interest conversion underpayments by ensuring land records are effectively managed, allowing for easy data mining of agreements involving payout provisions. Then you can match those agreements with relevant wells and reconcile payout status and revenue to address any issues.

Final thoughts

The digital oilfield presents a widening technology capability chasm. Like operating companies, non-ops are just as hungry for technology that enables them to focus on A&D decisions, audits and deal analysis, instead of being bogged down in revenue processing. Enverus has leveled the playing field. MineralSoft and EnergyLink have become the gold standard for non-ops to manage their business, a powerful combo that empowers them to automate revenue delivery and manage portfolios at any scale. Combined with Enverus data sets (wells, mineral appraisals, units, activity analytics, placed wells), Enverus helps you manage the entire mineral asset lifecycle from pre-acquisition due diligence through maximizing deal value for divestitures. We have more than 1 million properties under management accounting for 85% of North American royalty revenue and 350,000 wells (nearly half of total well count).

To get more details on solutions to help you manage your mineral assets, stay in pay and maximize revenue, fill out the form below to talk to an expert.

Eliot Stone

Eliot Stone

Eliot leads the Enverus Minerals Division, guiding a team of professionals that work with individual mineral owners, mineral investment funds, wealth management departments, banks, E&P mineral departments and foundations. Many of these groups seek ways to leverage technology to automate antiquated and costly mineral management practices and generate actionable insights all along the mineral and royalty lifecycle — from acquisition, through management, to divestiture. Eliot began his career in minerals as one of the early employees of MineralSoft and as a legacy mineral owner in Texas.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

Energy Transition
ByCarson Kearl

In a world where energy value can make up a small portion of the revenue stream from emerging business models, what else is at play? Enverus Intelligence Research® views effective energy transition business as taking advantage of two key additive...

Intelligence Oilfield Services
ByErin Faulkner

Permitting information for oil and gas wells is one of the most readily available and least lagged pieces of data on industry activity, but it is often seen as a poor indicator of future drilling activity.

Enverus Press Release - Exploring falling rigs and rising production
Energy Analytics Minerals

While horizontal drilling and hydraulic fracturing significantly enhance well productivity, they have had the opposite effect on the land department.

ByJoseph Gyure, Editor, Enverus Intelligence

All seven regions covered by the Enverus Day Rate Survey saw rates rise sequentially for the second time in three months in January as confidence started to strengthen among U.S. land drilling contractors.

Energy Transition Intelligence
ByJoseph Gyure, Editor, Enverus Intelligence

Ørsted took a blade to its project pipeline, reducing its ambition to 35-38 GW of installed capacity by 2030 from the previous 50 GW.

ByJoseph Gyure, Editor, Enverus Intelligence

SLB has reaffirmed its 2024 financial guidance, part of an effort by international oilfield services companies to reassure investors after the Saudi Ministry of Energy called off plans to increase its maximum sustainable capacity by 1 MMbo/d to 13 MMbo/d...

Analyst Takes Energy Transition

Despite the relatively scant incentives for buying an EV in the U.S. compared to other countries, the U.S. Environmental Protection Agency (EPA) presented its plan in 2023 to tighten tailpipe emissions regulations.

Enverus Blog - Increase visibility and efficiency with OpenTicket Mobile digital field ticketing software
Trading and Risk

Amid significant volatility in global energy markets, U.S. President Joe Biden’s decision to temporarily halt approvals for pending liquefied natural gas (LNG) projects seems to defy conventional trading wisdom. This audacious move has given rise to a variety of viewpoints...

Enverus Blog
Intelligence Trading and Risk

In the ever-changing energy landscape, understanding market fluctuations, weather conditions and system resilience is paramount when factoring ideas for trading opportunities.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Get Energy Transition Research updates straight to your inbox by filling out the form below.

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert